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Evidence based speculation, page-17

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Midnight26

4,791 Posts.

385

12/07/18

12:38

Post #: 34298991
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Originally posted by Midnight26 ↑

Don't go to too much effort. As I keep saying, the grade smashes any capital and productions costs.

If setting up a plant costs $10M and running costs are $10K/pd that's $13.65M costs in the first year. I'm exaggerating those costs just to prove a point. No doubt they'll come in much lower than that. I'm using AUD but these are just ballpark numbers - everything is much cheaper in Brazil.

If they commence production at 25Ktpa and the dirt is going (a conservative) 3oz AuEq (2 oz Au and 1 oz Ag) that's $127.5M in the first year and the capital is paid off in the first month which is a good measure of how profitable the operation will be.

Annual production costs of $13.65M divided by the metal produced at 25Ktpa (AUD $1.275M):

$13.65M / $1.275M = $49/oz production costs

This might help explain why this operation is going to be a money printing machine. What happens when they crank it up to 100Ktpa? ....then 1Mtpa with the full mining permit?

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Sorry, some typos in there and I should made it a bit easier to understand but the outputs are fine.

Annual production costs of $3.65M divided by the metal produced at 25Ktpa (75,000oz):

$3.65M / 75,000oz = $49/oz production costs

BBX Price at posting: 17.0¢ Sentiment: Buy Disclosure: Held
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